RUSSIA: Government readies auto industry package

The Russian government plans to spend 83 billion rubles on its plan to bail out the auto industry, Deputy Economic Development Minister Andrei Klepach has said at an official meeting on the auto industry.

Earlier on Friday, Prime Minister Vladimir Putin outlined the bailout plan. It includes auto loan subsidies, government purchases of automobiles and other measures.

The government has already decided to increase import duties on foreign-made cars for nine months next year.

Putin has also demanded that natural monopolies and state-run companies buy only Russian-made cars, and recommended private companies to do likewise.

"I'd like to say straight off that budget money, the funds of natural monopolies and, I hope, the largest private companies should be spent on buying domestically produced products," Vladimir Putin said.

"Now that our producers are forced to slash production, I think it is absolutely unacceptable to spend money on acquiring foreign cars," he said, specifying that Russian-made cars included foreign cars assembled in Russia.

Foreign carmakers who have invested billions in local assembly plants in Russia will be eligible for state industry support measures, Interfax quoted Prime Minister Vladimir Putin as saying on Friday.

"Foreign assembly companies working in Russia can also count on support from the state," Putin said in remarks reported by the news agency. "Of course, that means they have to fully comply with production localisation demands."

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